Texas insurance law requires insurance companies to acknowledge, investigate, and accept or reject insurance claims promptly.

The Prompt Payment of Claims Statute provided in the Texas Insurance Code imposes certain deadlines for an insurance company to acknowledge, investigate, and accept or reject a claim. If an insurance company violates Texas insurance laws and the insured party can prove the existence of coverage, then the insurer can be held liable for attorney's fees and an additional 18% per annum in addition to the amount of the claim.

Duties of the Insurer

Texas insurance laws impose the following duties on insurance companies after they receive notice of a claim:

• They must acknowledge receipt of the claim. Each separate claim requires separate acknowledgment.
• They must record the acknowledgment, making a record of the date, means, and content of the acknowledgment if it is not in writing.
• They must begin an investigation of the claim.
• They must request from the claimant all items, statement, and forms that the insurance company reasonably believes will be required from the claimant. Multiple requests may be permitted when reasonably necessary, but multiple incremental requests may in certain cases be a violation of the statute.

With a few exceptions, most insurers must perform these duties within 15 days following receipt of notice of a claim.

Additional Duties & Deadlines

Once the insurance company receives all items, statements, and forms reasonably required by them, they are obligated by Texas insurance laws to fulfill the following duties:

• The insurer must notify the claimant in writing within 15 business days that it accepts or rejects the claim. There is an exception permitted if the insurer suspects arson, and the insurer can also get a 45 day extension of the deadline.
• If the insurance company rejects the claim, the rejection notice must state the reason(s) for rejection.
• If the insurance company cannot accept or reject the claim by the normal deadline, they must notify the claimant and explain why more time is needed.
• Even if the insurance company gives notice of a requirement for additional time, they must still accept or deny the claim within the additional 45 day period.
• If the claim is valid, the insurance company must pay the claim within 60 days after receiving the items requested from the claimant. This is a strict deadline and if an insurer fails to meet it, they are liable for the claimant's attorney's fees and damages of an additional 18% per annum in addition to the amount of the claim.
• The insurer must pay the claim within 5 business days after notifying the claimant that the claim will be paid.
• If the insurance company makes an act by the claimant a condition of payment, then the deadline is 5 business days after the act is performed. (Surplus lines insurers have 20 days to fulfill their obligations under either scenario.)

Contact an Insurance Lawyer

If your insurance provider is violating Texas insurance laws by delaying settlement unfairly, or if your insurance company is refusing to pay benefits that were promised under your policy or represented to you by their agent, then you should seek assistance from a qualified insurance lawyer.